Monday, October 14, 2013

Iowa's Mechanics Lien

In Iowa , liens filed on private property or on funds relating to a public project are known as Mechanic's Liens. When an Iowa mechanics lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property. Iowa construction liens do not attach to publicly owned property in Iowa . If title to the land is held by the state or a political subdivision thereof, no mechanics' lien right is afforded. Projects performed by industrial development boards, however, are not considered publicly owned property, and therefore an Iowa mechanics' lien can be filed on industrial development board property.

Contractors, as well as subcontractors, design professionals, sub-subcontractors and material suppliers can file an Iowa construction lien. If a company supplies material to a material supplier, they are not eligible to file an Iowa mechanics lien claim.

In order to preserve their lien rights on residential projects, general contractors, or those who have a direct contract with the Owner, must file a "Notice of Commencement" within 10 days of commencement of work on the property. To maximize the enforceability of their Iowa mechanics liens, at the commencement of work on a residential property, subcontractors need to file a preliminary notice. A mechanics lien cannot be filed on residential property unless a prelien notice has been filed. If the general contractor or other person who has a direct contract with the owner has not posted the "Notice of Commencement of Work" before the subcontractor needs to file its Preliminary Notice, then the subcontractor must do so in addition to the Preliminary Notice. For commercial work, anyone performing work for a subcontractor must post a preliminary notice within 30 days from commencement of the work or delivery of materials.

Unless the property is a residential property, Iowa construction liens can be filed without a pre-lien notice. Preliminary notices or a Notice of Commencement of Work is required for all residential properties. Persons or companies supplying labor or materials to a subcontractor on a commercial property must file a prelien notice within 30 days from the date of commencement or delivery of materials.

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